Conducting Music's Digital Shift; A Top Lobbyist Seeks Harmony In a Time Of Discord

By LAURA M. HOLSON

Published: August 20, 2001

On a muggy Thursday morning in Washington the week before last, the recording industry lobbyist Hilary Rosen was in her Dupont Circle office doing what she does so well: working the phones.

A bill had been introduced in the House that would force big recording companies that license music for sale to their affiliated Internet sites to make the music available to other sites under the same terms. It was a move the big companies had opposed. And Ms. Rosen, no stranger to fierce political wrangling, was quick to size up who would be her best political allies.

One of her first calls was to Jack Valenti, the head of the Motion Picture Association of America, whom lawmakers both fear and respect. After a brief chat (''I thought The New Yorker piece on you was really good,'' she told him) she not only secured his support, but Mr. Valenti agreed to ask another group to send a letter to lawmakers on her behalf. ''So your staff is going to take care of that?'' she asked, leaning back in her chair and placing her feet on her desk. ''Great. See you, babe.''

It is no wonder that some in Washington call Ms. Rosen ''the other Hilary.'' Like the former first lady and junior senator from New York, Ms. Rosen is a political operator who cannot seem to escape controversy. And this fall Ms. Rosen may face her biggest challenge yet in the 14 years she has worked for the Recording Industry Association of America, the lobbying group that represents the political interests of the $15 billion industry.

Recording companies are being attacked on all sides. Consumers complain that the industry has been too slow to offer full-fledged online music services. Antitrust officials here and in Europe are investigating whether the labels used their market dominance to keep online competitors at bay by cutting sweetheart licensing deals for their own recently announced online ventures. Disaffected musicians argue that executives place profits ahead of artistic freedom. And lawmakers on Capitol Hill and California are stepping up their scrutiny of various industry practices -- including whether contracts are unfair to musicians.

All the while the industry's sales are flagging. The dollar value of music sales dropped 5 percent in the first half of 2001 compared with the first half of 2000, according to figures the association plans to release today. Product shipments, including compact discs and tapes, have plummeted 9.8 percent.

And so Ms. Rosen finds herself the voice of an industry that lately has few admirers. Yet, even some of her most outspoken critics, including Christopher B. Cannon, a Republican of Utah who sponsored the House bill Ms. Rosen opposes, marvel at her political acumen.

''I like people who play, and she's a player,'' Mr. Cannon said. (This, from a man who wrote recently on his Web site, ''Hilary's call for deregulation of the music industry has about as much credibility as Saddam Hussein calling for America to be kicked off the United Nations Human Rights Commission.'')

With a budget of $43 million and the backing of the big record labels that distribute 90 percent of the music sold in the United States, Ms. Rosen is indeed a player. On that recent Thursday, Aug. 9, Ms. Rosen had a meeting at the Hay Adams Hotel, a Washington power breakfast spot, with a top executive from the Universal Music Group, a unit of Vivendi Universal. They discussed recent arbitration hearings regarding how much Webcasters should pay recording companies for the right to stream music over the Internet.

Afterward, in her office, she read in Variety that Pamela Horovitz, the president of the National Association of Recording Merchandisers, threatened to support Mr. Cannon's legislation. Ms. Rosen was annoyed that Ms. Horovitz, whom she said she had known 15 years, had not called her first.

Turning to her keyboard, she began typing an e-mail message. ''Dear Pam,'' she read aloud, rolling her eyes, ''Is your phone broken?'' Then Ms. Rosen thought better of the sarcasm, deleted it, and composed a more measured message, asking Ms. Horovitz, ''Why fan the flames on these issues so divisively?''

To round out the day, in a conference room that afternoon she met with Mark McKinnon, a strategist working on the industry's behalf, who had just come from a White House meeting about music piracy.

It is some ways remarkable that Ms. Rosen, a 42-year-old socially progressive, straight-talking lesbian, would become the voice of the music industry. For it is still largely an industry with a reputation for paranoia and rampant egotism -- traits few associate with Ms. Rosen.

And unlike many of the quirky executives she represents, who started out reading sheet music or drafting record contracts, Ms. Rosen is at home with the politicos and the news media. That may be why music executives pay Ms. Rosen more than $1 million a year to speak for them.

''She is passionate,'' Doug Morris, chairman of the Universal Music Group, said of Ms. Rosen. ''I love that she is the representative of the industry.''